I was listening to a video aimed at human resources personnel whose job in 2012 is to help employees understand their 401(k)s and other retirement planning topics. The speaker was totally focused on this niche audience, but at least some of what he had to say is useful for the rest of us as we roll toward the new year.
Here are some nuggets gleaned from that retirement presentation:
- Keep it simple. It's good to balance your investments, but balancing doesn't mean putting your money into a dozen similar funds. Pick a few good ones and stick with them.
- Don't over-invest in equities. If all your money is in stocks and the market tanks, you could lose an uncomfortable amount.
- Learn to use social media. You don't have to be Tweeting all the time, but being familiar enough with Twitter, LinkedIn.com and Facebook to research people and trends can help keep you up to date.
- Do impulse savings. We all understand impulse purchases. Reverse that. Instead, when you've got it, save it in your retirement account.
- Take a look at your 401(k) costs and push back if the costs are high. Beginning in January, employers will have to tell you the cost of your 401(k) or other retirement savings account. Employers are getting prepared for tough questions. It's your job to ask them.
- Realize that a 401(k) is a terrific retirement tool -- but you have to keep at it. Don't give into temptation to use the money for something else.
- Don't count on Social Security. Despite the scare mongers, Social Security isn't going away anytime soon. But it may not be as generous for people who are still years away from retirement, so keep that in mind.